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Dividend yield

Dividend yield

The dividend yield of a stock is the percentage of the stock's value paid out in dividends annually. That's the annual dividend payment per share divided by the price of a share (times 100 to get a percentage).

If a company's shares trade for 50 USD and their dividend yield is 2.0 they will pay out 1 USD per year in dividends. The dividend yield may be based on the last calendar year or the last 4 quarters, depending on the source. Dividend yield varies as share price changes, since it's a percentage of the share price. Less frequently, dividend yield changes because a company changes their annual dividend payments. E.g. a company with quickly falling share price will typically have a larger dividend yield.

Related Links

Investopedia's definition of dividend yield

TheBalance article on dividend yield

Wikipedia's definition of dividend yield